US stocks attempted to rebound following strong results from Microsoft and optimism that most corporate balance sheets are still strong. Alphabet disappointed with both the top and bottom line as YouTube revenue came in sharply lower than expectations. Texas Instruments shares were lower after delivering a cautious outlook due to the effects from China’s COVID lockdowns.
It looks like Wall Street thinks the tech-selloff has been overdone despite both concerns over a hawkish Fed and uncertainty with Chinese growth. Most traders have a cautious outlook for the next couple of quarters, but a lot of these tech trades are too heavily discounted.
FX
King Dollar is not ready to give up its crown anytime soon after the German consumer confidence falls to a record low and on expectations the interest rate differential will only become wider between euro and the dollar. Europe’s largest economy is struggling with high inflation and uncertainty with energy prices as the war in Ukraine shows no end in sight.
Bitcoin
Bitcoin is benefitting from the all tech-led rebound in stocks. Bitcoin’s rebound is somewhat muted and capped below the USD 40,000 level given the strong dollar. If risk appetite remains strong on Wall Street, bitcoin could continue to rally, if earnings continue to impress, but shortly after Thursday’s mega-cap tech earnings, markets may enter a trading range until next week’s FOMC decision.
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